Take Two: Going for Brokers

Reynolds Corea’s story sounds like a tale right out of the Great Recession. A 57-year-old outsourcing executive with a six-figure salary at Accenture Plc., Corea was laid off at the height of the financial crisis. Within months he was making $10 an hour serving chicken and biscuits behind the counter of a Chik-fil-A in Philadelphia.

Only there’s a catch. Corea, the latest subject of SmartMoney’s ongoing series on 50-plus first-time entrepreneurs, was sitting on a half million dollars in retirement savings. His time at the fast-food chicken outlet was spent evaluating the corporate culture and daily operations of a franchise he hoped to purchase.

It seemed like a great plan. But nine months into it, Corea – and his wife, who couldn’t see him selling chicken – started having second thoughts.

As the article shows, Reynolds might have saved a lot of time and effort by seeking the help of a franchise consultant. Like real-estate brokers, franchise consultants – also called brokers or coaches — are a useful go-between for franchise buyers and sellers.

Consultants try to match a client with the right chain based on an assessment of the client’s business skills, resources and personal goals. In exchange, they take a piece of the franchiser’s one-time fee charged to franchisees when they ultimately purchase a location. With more than 3,000 franchisers on the market overseeing some 770,000 locations, that can require a lot of legwork. Yet the service is entirely free for the prospective franchisee – the consultant walks away empty-handed if a client chooses not to buy. For the franchiser, consultants offer strong leads that are more likely to convert into sales and expand the brand.

Not surprisingly, as the number of franchises grows, so too are the number of consultants, industry data shows. There are about 900 franchise consultants in the market, with 15 to 20 more joining every month, according to the Franchise Brokers Association.

The caveats? Consultants tend to develop a portfolio of preferred brands that can limit the options for clients. And as competition heats up, they may also be tempted to flip a client for a quick fee from a marquee chain, both for the cash and to pad out their resumes with client-drawing names like McDonald’s, Supercuts and 7-Eleven.

With the help of a consultant, Corea eventually bought a BrightStar outlet in West Chester, Pa., the senior home-care service chain with more than 130 locations nationwide. A successful business owner with more than a dozen employees, the former Fortune 500 executive now calls his time at Chik-fil-A a “humbling experience.”

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America’s entrepeneurs are executives who build companies from the ground up. In Charge provides news, analysis and in-the-trenches commentary about small-business management. Produced by Sarah E. Needleman, Emily Maltby and Angus Loten, with contributions from the Wall Street Journal staff and others. Have a comment or tip? Write to incharge@wsj.com.